Slovakia could yet derail plans to strengthen the euro zone's financial rescue fund, after the junior ruling coalition party rejected a proposal from its larger partner on Tuesday aimed at winning its support for expanding the fund's powers.
All euro zone member states must ratify plans to give the European Financial Stability Facility (EFSF) new powers to tackle the bloc's debt crisis, including the ability to extend preliminary credit lines to distressed countries and to buy sovereign bonds.
But a junior party in Prime Minister Iveta Radicova's coalition, the liberal Freedom and Solidarity (SaS) party, has so far refused to back the plan agreed by euro zone leaders in July.
SaS rejected on Tuesday a proposal by Radicova's ruling Slovak Democratic and Christian Union (SDKU) party to amend its pact with its coalition partners so that both parliament and parliament's budget committee must sign off on changes to the EFSF treaty. Previously the country's representative at the rescue fund did not need such parliamentary go-aheads from home.
The junior party said that the offer did not go far enough but that it was open to further talks, leaving open the chance that it could yet be persuaded to support the euro zone plan.
"SaS rejects the SDKU compromise proposal, but we are not against further negotiations," the party said on its website.
Slovakia's main opposition party has said it supports the plan for the EFSF, but that it would not support it just to prop up the government, which some analysts have said could fall due to the row.
Earlier in the day, Radicova told reporters it was too early to comment on whether she could tie EFSF ratification with a confidence motion, an idea floated by some in the government.
Euro zone leaders have pushed member states to swiftly ratify the boost to the EFSF. Slovenia became the eighth state of the 17-member euro zone to pass the plan on Tuesday.
Germany votes on Thursday, and coalition sources there told Reuters that it was unclear whether German Chancellor Angela Merkel's conservatives can deliver a parliamentary majority without help from the opposition.
In his first comments on Slovakia's foot-dragging, President Ivan Gasparovic urged lawmakers on Tuesday to back the EFSF's wider mandate, saying Slovakia cannot be a brake on efforts to tackle the bloc's debt crisis.
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